8-KRegulation FD

Salesforce, Inc. 8-K Report, Regulation FD Disclosure (Aug 18, 2006)

Filed August 18, 2006For Securities:CRM

Summary

This Form 8-K filing from Salesforce.com, Inc. (CRM) dated August 18, 2006, primarily disclosed information regarding a new Rule 10b5-1 sales plan adopted by Chairman and CEO Marc Benioff. This plan is designed for the orderly, open market sale of up to 5 million shares of the company's common stock over approximately one year, commencing after the completion of his prior trading plans. Investors should note that the adoption of such a plan is a pre-scheduled and systematic approach to selling shares, intended to comply with securities regulations. While the plan allows for significant share sales, it is executed within specific parameters and can be terminated at any time. Mr. Benioff's beneficial ownership as of the filing date was over 21 million shares. The company reiterated its general policy of not reporting on individual officer and director trading plans unless legally required.

Key Highlights

  • 1CEO Marc Benioff adopted a third Rule 10b5-1 sales plan.
  • 2The plan allows for the sale of up to 5,000,000 shares of common stock.
  • 3Sales will occur in the open market at prevailing market prices.
  • 4The plan is designed to comply with Rule 10b5-1(c) for orderly selling.
  • 5Sales are expected to commence on August 22, 2006, and continue for approximately one year.
  • 6Mr. Benioff beneficially owned 21,011,006 shares as of August 17, 2006.
  • 7The company generally will not report on individual officer/director trading plans unless legally required.

Frequently Asked Questions

A Rule 10b5-1 sales plan is a written document that allows company insiders, such as executives, to pre-arrange the sale of their company stock at a predetermined time or based on predetermined criteria. This is designed to prevent accusations of insider trading, as the plan is established when the insider does not possess material non-public information.

The filing indicates that Mr. Benioff adopted this plan for the 'orderly open market selling of a portion of his shares'. This is a pre-scheduled and regulated method to divest a portion of his holdings over time, rather than a reaction to specific company events.

No, the adoption of a Rule 10b5-1 plan by an executive is a standard and regulated practice for managing stock ownership. It does not inherently signal distress for the company. It is a mechanism for executives to diversify their personal assets in compliance with securities laws.

Under the Third Plan, Mr. Benioff could potentially sell up to 5,000,000 shares of Salesforce.com common stock.